Swadeshi Civil Infrastructure Private Limited vs. Union Of INDIA Through Executive Engineer Health Health Project Division Central Public Works Depar

Facts

The petitioner, Swadeshi Civil Infrastructure Private Limited, is the decree-holder seeking enforcement of an Arbitral Award dated May 29, 2023, corrected on June 14, 2023, for Rs. 82,44,50,737/- plus interest and 18% GST. The judgment-debtor is the Union of India through the Executive Engineer, Health Project Division, Central Public Works Department (CPWD). The decree-holder filed an execution petition on November 8, 2023. The judgment-debtor initially sought time to file objections and later agreed to pay in installments, with the first installment of Rs. 15 crores by April 30, 2024, and subsequent installments of Rs. 20 crores monthly. Despite court orders and assurances, the judgment-debtor failed to make payments, leading to repeated court interventions, including attachment of bank accounts. The current application seeks modification of a previous order regarding the balance amount due, which is Rs. 18,31,07,347/-.

Held

The Court held that the judgment-debtor has shown continuous defiance and obstinacy in complying with the court's orders and the final Arbitral Award. The Court noted that despite having the requisite funds, the judgment-debtor has made the decree-holder run from pillar to post and has wasted valuable time of the court and state machinery. The Court found no option but to proceed under Section 51(c) of the CPC to arrest and detain the person responsible for non-compliance. The Court reasoned that the judgment-debtor is not similarly situated to a debtor unable to pay, as evidenced by their wilful failure to pay despite having means. The Court ordered the attachment of two specific bank accounts (A/C. No. 3247460792-7 and 3486694057-2 at State Bank of India, Tis Hazari) and directed a sum of Rs. 18,31,07,347/- to be remitted to the Registrar General, Delhi High Court. The Court also directed the judgment-debtor to file an affidavit identifying the senior-most person responsible for non-compliance. The attachment of two other accounts with zero balance was ordered to be released. The Court also noted that the Arbitral Award had attained finality as no Section 34 petition was filed.

Key Issues

1. Whether the Court can proceed to attach the bank accounts of the judgment-debtor for non-compliance with the Arbitral Award and subsequent court orders, particularly in light of Section 51 of the Code of Civil Procedure, 1908 (CPC)? Petitioner's arguments: The petitioner argued that the judgment-debtor has shown continuous defiance and obstinacy in complying with the court's orders and the final Arbitral Award. They contended that the judgment-debtor, being an instrumentality of the state, has the funds and is duty-bound to honor the decree. The petitioner relied on Section 51 of the CPC, which permits attachment of accounts and arrest/detention in prison for execution of decrees. They also cited Subrata Roy Sahara v. Union of India to emphasize that if a judgment-debtor has the means but wilfully fails to pay, they are not similarly situated to those unable to pay. Revenue's arguments: The judgment-debtor, represented by learned ASC for GNCTD, confirmed the typographical error in the previous order regarding the balance amount. While not explicitly arguing against the attachment of accounts, their conduct throughout the proceedings indicated a struggle to comply with payment directions.